A three wedge failure mechanism is proposed to determine active earth pressure exerted by narrow backfills on gravity retaining walls and its point of application. Gravity retaining wall proportions are optimized against external failure modes using proposed active earth pressure and its line of action of resultant thrust. Overturning failure, eccentricity failure of the resultant force, sliding failure on its base, and bearing capacity failure are given due consideration for the determination of optimum proportions of gravity wall. Optimum dimensions of the gravity wall are evaluated such that factors of safety against overturning, eccentricity, sliding, and bearing capacity should be greater than 2.0, 1.0, 1.5, and 2.5 respectively. Significant reduction in active earth pressure in narrow backfill width gravity retaining walls is noticed due to the inadequate development of shear bands because of the constraint of rock face boundary. The study recommends employing an appropriate failure mechanism for the development of shear bands behind retaining wall based on depth and width of narrow backfill. The proposed study indicates that significant savings in the cross sectional area may be accomplished as compared to a classical design by Coulomb’s theory. © 2020, Springer Nature Switzerland AG.